The primary goal of the global agenda for sustainable development is the decrease of poverty but developing cost-effective poverty reduction programs and safety nets, the identification of the poor and the assessment of the severity of poverty are the matter of concern for every developing nation which require accurate determination of poverty resulted in the form of effective and significant policy impact while in Pakistan, one of the variables used to calculate each province’s share of the federal allocations sent to the provinces through the National Finance Commission (NFC) Award is poverty.
Numerous efforts are taken to estimate poverty and poverty lines in Pakistan. Recently, the government adopted the Cost of Basic Needs (CBN) method, a one-dimensional technique, to gauge poverty. The CBN method estimates that in Pakistan, 24.3% of the population is considered to be living in poverty. Pakistan also use the Multidimensional Poverty Index (MPI), which is based on factors of living standards, health, and education. Approximately 39% of Pakistanis experience many forms of poverty. For economic and social wellbeing of any country, it is mandatory to pull people out of poverty so, Governments always striving hard to exterminate the multidimensional poverty either directly through creating job opportunities or indirectly through providing people with basic health and education facilities. Projects like Five million low-cost housing units, employment, industrial subsidies, and institutional reforms in the health and education sectors are a few initiatives taken by the state to lessen the threat of poverty. The goal of all these advances is to raise the living conditions of the underprivileged but Pakistan need targeted programs to confront the current multifaceted poverty which demand understanding of the Chinese approach of poverty eradication that focus on the effective use of the limited resources available. China’s anti-poverty program was tailored to the needs of the impoverished in both the rural and urban areas individually. In order to get immediate results, urban administration used focused strategies, where rural programs were mostly funded by the federal government. Poor people who lacked a reliable source of income, lacking abilities to work, and have no guardian were taken into consideration under this scheme. Subsequently, this initiative was expanded to help the underprivileged with health and educational issues. Also, numerous employment were given to the impoverished by rural or urban authorities so they could support themselves independently and pay for their basic requirements. Another program, known as “food-for-work,” gave the opportunity for the poor in rural regions who had no other means of support to work on a government project in exchange for receiving nutritious food in addition to their pay.
The Chinese government’s remarkable achievement in reducing poverty in urban and, most significantly, rural areas is largely due to its intensified structural reforms. China has made significant progress in reducing poverty over the past 40 years by enacting ground-breaking structural changes and trade policies. In 1978, the nation supported anti-poverty initiatives. According to the World Bank, China’s efficient poverty-reduction measures helped to lift 700 million people out of extreme poverty by 2017. This period of time saw a ground-breaking decrease in the poverty rate, which went from 88% in 1981 to just 2.1% in. Such astounding changes in poverty reduction are made possible by the consistent and quick economic growth accompanied by a stable political environment. The traditional Chinese program to combat poverty, was created within a planned economic system which was designed to aid the “Three-Withouts,” which are,
- Sustainable source of income
- the ability to work
- Legal guardianship.
Nonetheless, the high incidence of unemployment and economic disparity created a pressing need for the creation of more extensive social assistance programs that might be used as a last option to rescue individuals from abject poverty. Many social variables had a dis-equalizing effect at the beginning of trade but the only way to protect extremely poor individuals is to provide them with a basic safety net through the provision of social assistance. Chinese poverty types, instances, and the steps taken by succeeding administrations are:
And the main factor in reducing poverty was institutional arrangements combined with focused actions. Strong political will and perseverance. The China’s largest poverty alleviation program was based on constitution of the institutional framework that describes what kind of institutions were used, what rules were made to profile the poor, how to scrutinize the applicants and how government officials were made accountable. The program includes provision of Low Rent Houses for the Poor funded by local and backed by the central government, targeted Health Reforms for only rural area but later it was provided nationwide under Dibao and Wubao programs. Medical succor was provided in the form of cash subsidies – majorly through reimbursement to avoid cash usage for other tenacities, including inpatient treatments, insurance premiums and also doctor’s visits. In addition, a tailor-made insurance program was also executed. Under this program, low cost medical insurance was provided to low income people whereas free insurance facility was given to the poor segment of population. This rationing in health sector has enabled Chinese government to target deserved people while excluding free riders, Educational Emergency was the third pie of social assistance program launched by Ministries of Civil Affairs and Education. Funded by central and local governments, it provides support for implementing policies by the non-government organizations. Education remains the keen focus of Chinese government on the rationale that it makes people independent. Education helps people in earning livelihood and improves their lives. These state interventions helped the government in dealing with large-scale poverty in China, which ultimately pulled the masses from poverty trap.
In Pakistan, 24.3% of the population continues to live in poverty. Notwithstanding the fact that the poverty headcount ratio has been 26% since 2005, significant adjustments still need to be made.
Due to the detrimental effects of the drought, lack of access to clean water, widespread unemployment, and lack of medical services, poverty in Pakistan is multifaceted. Pakistan could take lessons from China’s experience in eradicating poverty. Few suggestions are:
- Putting Institutional Reforms into Practice The institutional setting for administering the social security program serves as the success’s cornerstone. Pakistan should adopt an institutional structure similar to the one used by China to enforce dual performance pressure. Even though 10.3% of the reward from the 7th National Finance Commission (NFC) was awarded based on poverty, this is insufficient. Poverty reduction must be included to the next NFC reward in place of the divisible pool’s poverty head count. It is because the distribution of funding based on poverty lacks any motivation to take action to eradicate poverty.
- CCT is preferred over UCT. The government should introduce conditional cash transfer (CCT) programs rather than unconditional cash transfers like the Benazir Income Support Program (BISP). China introduced these programs, which India effectively adopted. These will aid in reducing food insecurity for the poor. It has been observed that even when people are in desperate need of necessities, they do not use UCTs logically. To ensure that households can provide for their fundamental needs, CCTs are advised.
- Specialized Employment Programs China’s social security policy can be copied with Pakistani tweaks to address the issue of unemployment in rural regions. The Chinese government employed jobless individuals for a variety of tasks so they could support themselves. For this goal, programs like “food-for-work” were established. China provided jobless people with work. The jobless were offered positions as gatekeepers, security guards, and laborers on construction projects. India has adopted this strategy, giving work to the underemployed and employing their labor for projects like building roads. Pakistan’s rural areas have high rates of poverty and unemployment, thus by imitating China’s approach, the issue of unemployment may be resolved.
- Health Reforms must be introduced in both urban and rural Pakistan, there are serious health issues. The Khyber Pakhtunkhwa (KPK) government has put into place health measures that would help 1.8 million people. Like China, Pakistan should implement dynamic health policies that provide free insurance to those who cannot afford it but low-cost insurance to those with lower incomes. Targeting the poor for individuals who cannot afford pricey medical services, rationing is necessary. The issue of poor health in the lower class must be addressed nationally via health reforms. Due to fewer work alternatives, increased agricultural costs, and a single susceptible source of income, malnutrition is mostly seen in rural regions. Economically weak parents are unable to give their kids a healthy life, which has an impact on their health.
- Increasing the Capacity of Local Government Institutions in Pakistan, local government institutions are weak since each administration sought to retain exclusive control over all decisions. Institutions of local government that aren’t deregulated make it harder to decentralize authority to the municipal level. As Pakistan’s new government intends to support a strong local government, it will eventually assist in pursuing development initiatives and include people at all levels. While representatives are chosen by the general public and from higher echelons of the government, local governments are answerable to the people. Combining top-down and bottom-up strategies will assist to improve service delivery and focus on the underprivileged.
- Go for projects with several targets. The incoming administration plans to carry out initiatives like the national planting of 10 billion trees and the construction of 5 million affordable homes. Everyone will benefit from inexpensive housing if those who are unemployed and live below the poverty line are included. In this sense, the food-for-work and employment-for-living models used in China and India are the most important to study. More groups must be targeted in order to get more effective outcomes since microfinance has a good influence on reducing poverty in Pakistan. As a result, Pakistan needs multifaceted programs to combat multifaceted poverty.
In Pakistan, reducing poverty is the long-awaited initiative on many fronts. Even if the BISP and other programs contributed to reduce poverty, more focused and targeted policies are required to completely eradicate it. Changes must be made to the institutional framework’s effectiveness in order to support local government and reduce unemployment. After considering adjustments to the household setting, the food/job-for-work model from China should be emulated. Pakistan’s poverty rate is still quite high, thus policymakers must take fast action. Adopting efficient and timely strategies to reduce poverty in Pakistan will help Pakistanis avoid facing hunger, unemployment, and eroding human capital. . Due to the detrimental effects of the drought, lack of access to clean water, widespread unemployment, and the absence of health services, poverty in Pakistan have several dimensions. Innovative strategies must be used to eradicate extreme poverty and rescue the poor from the poverty trap by following China’s lead. Pakistan may reduce the degree of poverty by supporting programs that are specifically designed for the underprivileged. To combat poverty, local governments must assume responsibilities. To produce meaningful outcomes, the involved local and central government departments must operate together and concurrently so, multidimensional targets are the only solution to target multidimensional poverty in Pakistan.
The Author is MD IRP/ Faculty Department of H&SS, Bahria University Karachi